SPY 22/06/22 Opening Drive Fade?
Updated
SPY is believed to be in a retracement, but we're looking for a potential early reversal to the downside.
21/06:
Gapped +1.79% pre-market, & opened strong, where price mostly stayed above VWAP. A fake-out occurred at $376.31, & made a high at $376.52, before selling off strongly at the close.
Idea:
A weak close could mean that buyers took profit at end of day, as they're not confident enough to hold positions overnight for another green day. At this time of writing (22:57 BST), after hours show flat action (no panic flush nor upward drive), which may entice traders to go long tomorrow (BULLISH PRE-MARKET ACTION CAN GIVE BETTER CONFIDENCE FOR OPENING DRIVE). This may lead to another opening drive (encouraged by bigger market participants), where it'll meet resistance with the $376.31 & $376.52 levels, & if successful, price could break-out to the upside to fill the remaining gap between levels $376.52-$377.52.
Look for a reversal at the $376.31 & $376.52 levels, or once the $376.54-$377.52 gap has been entirely(?) filled, accompanied with dried volume. When price breaks the VWAP to the downside, this will confirm the reversal (another entry here?). Take profit at $371.90 level, & the $365.90-371.90 gap could also be filled, so break-down entries can be done at the $371.90 level, taking profit once that gap has been filled completely.
(Idea will be updated 30 minutes before 22/06 open to account for pre-market action).
21/06:
Gapped +1.79% pre-market, & opened strong, where price mostly stayed above VWAP. A fake-out occurred at $376.31, & made a high at $376.52, before selling off strongly at the close.
Idea:
A weak close could mean that buyers took profit at end of day, as they're not confident enough to hold positions overnight for another green day. At this time of writing (22:57 BST), after hours show flat action (no panic flush nor upward drive), which may entice traders to go long tomorrow (BULLISH PRE-MARKET ACTION CAN GIVE BETTER CONFIDENCE FOR OPENING DRIVE). This may lead to another opening drive (encouraged by bigger market participants), where it'll meet resistance with the $376.31 & $376.52 levels, & if successful, price could break-out to the upside to fill the remaining gap between levels $376.52-$377.52.
Look for a reversal at the $376.31 & $376.52 levels, or once the $376.54-$377.52 gap has been entirely(?) filled, accompanied with dried volume. When price breaks the VWAP to the downside, this will confirm the reversal (another entry here?). Take profit at $371.90 level, & the $365.90-371.90 gap could also be filled, so break-down entries can be done at the $371.90 level, taking profit once that gap has been filled completely.
(Idea will be updated 30 minutes before 22/06 open to account for pre-market action).
Note
9:04 ET - Pre-market gap is -1.87%. Opening drive at open seems very unlikely now, so play for today is off the table.Note
11:11 ET - Last 30 minutes of pre-market showed bullish action, taking out the pre-market high of $370.66, & opened strongly, breaking previous day levels & filling the gap at $376.52-$377.52. This is the 3rd pullback, so could be the inflection point for price to then head towards the remaining $365.90-370.66 gap, or at the very least the VWAP.Pre-market was bearish as mentioned earlier, so I personally wouldn't have traded the opening drive fade as the criteria wasn't met.
Note
Price managed to fade to VWAP at 12:05PM ET
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